2024 (6) TMI 829 - HC - GST

Tax Assessment Voided: Cooperative Society Wins Challenge After Procedural Fairness Violation in Hearing Rights Dispute

HC quashed tax assessment orders due to breach of natural justice. Court found petitioner (cooperative society) was not given proper opportunity to be ... Validity of assessment orders - opportunity of hearing not provided - breach of principles of natural justice - HELD THAT:- The impugned assessment orders indicate that the petitioner was not heard before such orders were issued. The tax liability arises out of alleged discrepancies between the GSTR 3B & GSTR 2A returns or between the GSTR 7 and GSTR 2A returns. If the petitioner had been heard, the petitioner may have been in a position to place all relevant documents on record to endeavour to provide a satisfactory explanation for the discrepancies - the impugned assessment orders call for interference by putting the petitioner on terms. The impugned assessment orders are quashed subject to the condition that the petitioner remits 10% of the disputed tax demand under each assessment order within a period of two weeks from the date of receipt of a copy of this order - Petition disposed off. Issues involved: Assessment orders challenged on grounds of breach of natural justice.Summary:In the present case, the petitioner, a Government aided Co-operative Society assisting small printing press owners, contested assessment orders for four distinctive periods, alleging a breach of natural justice. The impugned orders were issued following show cause notices, which the petitioner claimed were not accessed due to lack of computer knowledge. The respondent, represented by Mr. V. Prashanth Kiran, Government Advocate, argued that personal hearings were offered but the petitioner failed to attend. The petitioner expressed willingness to remit 10% of the disputed tax demand for remand.The Court observed that the petitioner was not given an opportunity to be heard before the assessment orders were issued, leading to discrepancies in tax liability. Consequently, the Court quashed the assessment orders, subject to the condition that the petitioner remits 10% of the disputed tax demand under each order within two weeks. The petitioner was allowed to submit a reply to the show cause notice within the same period. Upon compliance, the assessing officer was directed to provide a reasonable opportunity for a personal hearing and issue fresh assessment orders within two months.Furthermore, the assessment officer was instructed to consider web copies submitted by the petitioner. The Writ Petitions were disposed of with no order as to costs, and connected miscellaneous petitions were closed accordingly.